FG Sues Binance For $81bn Over Economic Losses
The Federal Government is demanding $81 billion in compensation from Binance Holdings Limited, a cryptocurrency company, for alleged economic losses tied to its operations in Nigeria.
The government claims that Binance deliberately operated in secrecy despite its substantial economic presence in the country. The Federal Government further accuses the company of breaching several financial and tax regulations, including the Companies Income Tax Act, the Federal Inland Revenue Service (FIRS) Act of 2007, the Central Bank of Nigeria’s regulatory framework for mobile money services, and the Significant Economic Presence (SEP) Order, which applies to foreign firms earning at least N25 million annually from digital services in Nigeria.
In an affidavit filed by Jimada Yusuf, a member of the special investigation team at the Office of the National Security Adviser (ONSA), it is alleged that Binance has been operating in Nigeria for over six years without proper registration. Yusuf stated that Binance executives Tigran Gambaryan and Nadeem Anjarwalla admitted to this during a meeting with the Securities and Exchange Commission (SEC) in 2024.
The affidavit further claims that in a letter dated February 20, 2024, Binance acknowledged having 386,256 active Nigerian users, with a trading volume of $21.6 billion and net revenue of $35.4 million for the 2023 calendar year.
Representing the FIRS, lead counsel Kanu Agabi (SAN) argued that Binance is liable for corporate income tax in Nigeria and must submit income tax returns for the years 2022 and 2023. The FIRS is also seeking a court order compelling Binance to pay $2.001 billion in unpaid income taxes for the two years, in addition to a 10 percent annual penalty for overdue taxes.
The FIRS is requesting that an annual interest rate of 26.75 percent, based on the Central Bank of Nigeria’s lending rate, be applied to the outstanding tax amounts from January 1, 2023, and January 1, 2024, until full payment is made. Furthermore, the FIRS seeks to hold Binance accountable for economic losses totaling $79.51 billion and N231 million.
In the latest court session, Justice Inyang Ekwo granted a motion for substituted service, permitting legal documents to be served to Binance through alternative methods. The case has been adjourned until March 3.
